How we are spending stimulus checks

by
Garret Ellison | The Grand Rapids Press

Wednesday June 11, 2008, 6:11 PM

Press Photo/Rex LarsenJeremey Sturdavant used his $300 stimulus check to get a tattoo. "I'm supporting the local economy one tattoo at a time" he said.

GRAND RAPIDS -- Jeremey Sturdavant did exactly what our legislative leaders hoped he would do with his economic stimulus money... kind of.

He spent it.

On a tattoo.

"It kind of goes along with an accident I got into in 2001 -- I broke my neck," said the Tenibac-Graphion Inc. employee. The tattoo is a jester on his right shoulder, holding dice.

"I've been waitin' to do it and just haven't been able to save the money," he said.

In this case, The Tattoo Parlor & Piercing Studio at 526 Leonard St. NW was the beneficiary of Sturdavant's $300 stimulus rebate sent by Uncle Sam.

The $50 billion send out so far is working its way into the country's financial bloodstream. Taxpayers with direct deposit have already received their money. Consumer relying on the post office will receive checks through mid-July.

Scammers after stimulus money

Unsurprisingly, the IRS is reporting several rebate-related e-mail scams circulating online.
The scams ask you to respond with information to get your stimulus money. The IRS is warning folks that they will never send unsolicited e-mails about taxes. If you get one, DO NOT open or follow any links. Delete or forward it to phishing@irs.gov

In response, consumers across the country stepped up spending at least a tad, giving discount and warehouse retailers such as Wal-Mart and Costco stronger-than-expected sales for May, according to a preliminary report from Thomson Financial.

But, with gasoline selling over $4 per gallon, most Grand Rapids consumers interviewed by The Press are doing just what economists predicted: stashing the money for future bills or debt.

"I got it two days ago," said Phil Quist, 66, of Grand Rapids. "It's just going into my checking account and filtering out from there."

Retailers like Meijer, Kroger, Art Van Furniture and ABC Warehouse had their eye on that stimulus money early, offering discounts like Meijer's May promotion, which gave a $30 dollar coupon for every $300 worth of rebate money shoppers used to buy a gift card.

"We did see a really good response to that program," said Frank Guglielmi, Meijer public relations director who declined to disclose any sales data.

Same goes for Art Van Furniture, running a promotion through July 31. The 28th Street store managers said a 10 percent-off promotion on purchases made with stimulus money has "made a difference."

"I know for a fact that people are bringing those checks in," said clearance center manager Mike Saxton, citing a customer who had come in the day before.

Economic analysts had predicted gloomy figures for May. Consumers everywhere are struggling with rising energy costs, sagging home values and tight credit. Confidence reached a 16-year low in May, the Conference Board reported late last month.

However, according the Thomson Financial report, of 31 retailers reporting their May sales, 18 beat expectations, three met expectations and 10 missed. The tally is based on same-store sales, or sales in stores open at least a year; considered a key indicator of a retailer's strength.

"It certainly looks as though gas tanks didn't siphon off all of the rebate stimulus," said Ken Perkins, president of RetailMetrics LLC, a research company in Swampscott, Mass. "Consumers were able to spend in May."

The UBS-International Council of Shopping Centers retail sales tally for May rose 3 percent, surpassing the 1 percent growth estimate.

Tom Schoewe, Wal-Mart's chief financial officer, said last week that $350 million worth of stimulus checks had been cashed in their stores already, but he didn't know how much of that money was actually spent at Wal-Mart.

As of May 30, the Treasury Department said 57.43 million payments have been sent out totaling $50.041 billion, just under half the $106.7 billion the government expects to send out.

Along with debt and bills, many consumers are using that money to cover summer travel expenses beyond gasoline.